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New rate leader: Scotiabank, Scotiatrust, Scotia Mortgage Corp., and ADS Canadian Bank - 3.80%
November 1, 2022
6:38 pm
Doug
British Columbia, Canada
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In a surprise announcement, Scotiabank Advisor Deposit Solutions announced that the interest rates on the Series A and Series F versions of the brokered HISAs (held in street name) had increased to 3.65% and 3.80%, respectively. Most commonly, these ISAs are held through discount brokerages and full service investment brokers. For the Scotiabank Group of companies, this is Scotia iTRADE. The rate is not a promotional rate, and now has the distinction of besting all available HISA rates in the Canadian HISA rate chart. Next highest is Oaken Financial, at 3.40%. I suspect the other broker HISAs from the other Big Six banks will move up to match, or roughly match, Scotia's move, if they haven't already.

Series F (3.80%) ISAs from Scotiabank Group
The Bank of Nova Scotia Investment Savings Account (DYN6004)
ADS Canadian Bank Investment Savings Account (DYN5004)
Montreal Trust Company of Canada Investment Savings Account (DYN3065)
National Trust Company Investment Savings Account (DYN3055)
Scotia Mortgage Corp. Investment Savings Account (DYN3075)

Series A (3.65%) ISAs available on the website.

Broker HISAs have historically been at a discount to direct-to-consumer HISAs, but we now have the interesting situation whereby the the usual direct-to-consumer HISA charts on various websites now no longer have the highest, non-promotional interest rates.

To be sure, moving funds to broker HISAs is not as quick, or as seamless, as there are lower transfer limits (if using online bill payments) and you have to set up your account links on the discount brokerage side only to pull funds in. That process takes 1-2 business days, then there may be a hold on some or all of the funds before you can place the "trade" to buy units in the ISA. But, for longer term deposits (i.e., at least 3 months), it may be worthwhile to make the switch. And your executor(trix) will love you and the simplicity of your deposits. sf-cool

Footnote: Historically, we had no access to Series F variants of the ISAs, but with recent regulatory moves, we now do, which is awesome...downside is mutual funds now have trading fees (but the ISAs don't have any fees).

Cheers,
Doug

November 1, 2022
7:18 pm
AltaRed
BC Interior
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As noted, that happened the morning of Oct 26th for all the Scotia companies, actually before the BoC announcement. Also please note these are Broker ISAs in nominee name, not HISAs in client name.

Also, the Series A vs Series F issue has nothing to do with the regulatory moves to ban trailer fees effective June 1st......for mutual funds. That only applied to mutual funds and these ISAs are deposit accounts (not covered by regulatory actions).

AFAIK for the time being, one can only buy the Series A versions at some DIY brokerages. AFAIK 2, only Scotia iTrade is allowing the purchase of their F series (which I have done). In the meantime, I also have Series A BMT family at BMO IL and spouse has Series A RBF family at RBC DI.

This has also been covered in threads such as https://www.highinterestsavings.ca/forum/general-comparisons/brokerage-investment-savings-accounts/

November 1, 2022
7:35 pm
Doug
British Columbia, Canada
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AltaRed said
As noted, that happened the morning of Oct 26th for all the Scotia companies, actually before the BoC announcement. Also please note these are Broker ISAs in nominee name, not HISAs in client name.

Also, the Series A vs Series F issue has nothing to do with the regulatory moves to ban trailer fees effective June 1st......for mutual funds. That only applied to mutual funds and these ISAs are deposit accounts (not covered by regulatory actions).

AFAIK for the time being, one can only buy the Series A versions at some DIY brokerages. AFAIK 2, only Scotia iTrade is allowing the purchase of their F series (which I have done). In the meantime, I also have Series A BMT family at BMO IL and spouse has Series A RBF family at RBC DI.

This has also been covered in threads such as https://www.highinterestsavings.ca/forum/general-comparisons/brokerage-investment-savings-accounts/  

Yeah, I did say they're held in street name (another name for nominee name).

As for the other point, I believe it does, if maybe indirectly. Before the regulatory move banning discount brokerages from receiving trailer fees, I believe the DBs thought it was simpler to end their ban on buying series F funds rather than have to refund the trailer fees at the end of the year.

Cheers,
Doug

November 1, 2022
7:40 pm
hwyc
GTA
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The news was first reported here on Oct 26 7:19 am #53

November 1, 2022
7:59 pm
AltaRed
BC Interior
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Doug said
Yeah, I did say they're held in street name (another name for nominee name).

They are also ISAs (Investment Savings Accounts), not HISAs (High Interest Savings Accounts) as your original post asserts. That may sound picky but sometimes semantics matter.

On the regulatory side, as I understand it, it was the mutual fund companies that wouldn't let the discount brokerages sell Series F funds. The mutual fund companies were taking heat from 'fee for service' advisors who didn't like to compete with DIY types with a 'no fee' model.

Anecdote true case: Back in circa 1998, when I first opened a discount brokerage with E*Trade Canada (predecessor to Scotia's buyout of E*Trade Canada), I actually bought F class mutual funds there, such as Bissett Canadian dividend fund (or some name like that). A year later when I went to buy more F class, E*Trade Canada said I could no longer do that because they'd lose the Bissett family fund offerings if they continued to sell F class. Interestingly, I had that F class Bissett fund (eventually under Templeton) for another 10 years or so, even after Scotia bought it.

November 1, 2022
8:37 pm
Norman1
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The ban of trailing commissions fees paid to order-execution-only dealers only applies to mutual funds.

The ban is implemented through National Instrument 81-105 (Mutual Fund Sales Practices) subsection 3.2(4):

3.2 Trailing Commissions

(4) Despite subsection (1), no member of the organization of a mutual fund may pay a trailing commission to a participating dealer in connection with securities of the mutual fund held in an account of a client of the participating dealer if the member knows or ought reasonably to know that the participating dealer was not required to make a suitability determination in respect of the client in connection with those securities.

Financial institutions continue to be free to pay trailers and embedded compensation to order-execution-only brokers for deposits, like savings accounts and GIC's.

The way it is worded, the subsection does not prevent order-execution-only brokers from receiving trailers and other compensation from exchange-traded funds.

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